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Last Post 05/07/2008 7:57 PM by  okclarryd
Another Blow to Professional Adjusting
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johnpostava
SIMSOL.com
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04/14/2008 10:41 AM

    Xactware and ServiceMaster have teamed up to offer insurance carriers a contents estimating service.  Now the carriers are using restoration contractors to handle contents claims.  Pretty soon there will be nothing for property adjusters to do except review and pay contractor invoices.  Seems to me the ServiceMaster estimator is practicing adjusting if he starts valuing inventories and settling claims with insureds and would need a license in most states to be able to do so.  It must be the carriers will use inside adjusters to manage these claims (paper pushers with little or no adjusting expericence).

    Tags: On The Job
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    Ray Hall
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    Posts:2443


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    04/14/2008 12:14 PM

    John you are now beginning to sound like an old sore head adjuster (Trader) that says insurance carriers do not care what they pay on losses as its all part of the rate structure; but the adjusting expense is not.

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    johnpostava
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    04/14/2008 12:27 PM
    Ray,
    Me an old sore head - no way. I just dislike seeing other entities doing what adjusters are supposed to be doing. You can bet Xact/ServiceMaster/ISO will not be giving away this service for free and every dollar they make from it takes it out of the hands of independent and cat adjusters (and their families).

    I have been fortunate enough to have found property adjusting with many good times had and have made hundreds of friendships over the years. I've met honest policyholders and not-so-honest ones (which are in the great minority I am glad to say) and now can spot one a mile away. Adjusting gives one the opportunity to really meet folks from all walks of lives and professions. I just don't want to see the independent adjusting profession go the way of the 8-track tape player manufacturer.

    I would like to see more young blood in our profession but if trends continue, the young guys (and gals) won't have the same opportunity as we did 20 years ago.
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    Medulus
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    04/14/2008 5:17 PM

    I just heard something last week which warmed the cockles of my heart.

    I had assigned three claims to an independent.  He called me to discuss coverage before writing up the claims.  I told him to make sure each building was properly separated with the correct O and P and tax included in each building and the contents written separately rather than lumped together.  I went on to tell him that it was a difficult process in Xactimate, but I would walk him through it if he wanted.

    He surprised me by saying that he could do the extimate in Xactimate if I wanted him to, but that his company had chosen to use Simsol and he had just installed it.  I went on to congratulate him for hooking up with a wise company.  And I told him to please go ahead and try Simsol because the separations I was asking him to make could be done so much easier in Simsol.  That was Friday afternoon.  All three of the estimates he was writing up were in my inbox when I walked in on Monday morning. 

    I'm so used to adjusters telling me that their companies make them use Xactimate, that it took me by complete surprise to find a company encouraging their adjusters to use another product.  My policy here at the property department at ICW is to look at how good the adjuster using the product is rather than what product they're using.

    Steve Ebner CPCU AIC AMIM

    "With great power comes great responsibility." (Stanley Martin Lieber, Amazing Fantasy # 15 August 1962)
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    Scottie
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    04/15/2008 2:44 AM

    In my opinion, Service Master will only be offering the Adjusting Firm a transitional step in pulling the contents loss adjustment from the adjuster.  Once they see how the kid at Service Master is knocking out those contents lists, the light bulb will come on.  The Adjusting Firm owner will think, heck I can pay my niece $10/hr to surf ebay and do Contents Loss for me........

    It may appear as though I posted this at 2 am and have nothing better to do than surf CADO till the wee hours of the morning....but actually I'm sitting in the office in Northern Iraq and its only 10 am....ha. 

    Logged onto Webce.com and catching up on CE hours.  Hoping to come home soon!

     

    Scottie

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    Florida Boy
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    04/15/2008 8:55 AM

    Posted By John Postava on 04/14/2008 12:27 PM
    Ray,
    Me an old sore head - no way. I just dislike seeing other entities doing what adjusters are supposed to be doing. You can bet Xact/ServiceMaster/ISO will not be giving away this service for free and every dollar they make from it takes it out of the hands of independent and cat adjusters (and their families).

    I have been fortunate enough to have found property adjusting with many good times had and have made hundreds of friendships over the years. (1) I've met honest policyholders and not-so-honest ones (which are in the great minority I am glad to say) and now can spot one a mile away. Adjusting gives one the opportunity to really meet folks from all walks of lives and professions. (2) I just don't want to see the independent adjusting profession go the way of the 8-track tape player manufacturer.

    (3)I would like to see more young blood in our profession but if trends continue, the young guys (and gals) won't have the same opportunity as we did 20 years ago.

    1) Yes, and that took a lot of field experience.

    2) It is heading that way in Florida in property.

    3) No, they will not. Cat work is fast becoming quasi staff , a reporting quagmire....without the benefits.

    Contents may be just the beginning. Xactware has other programs that interface with estimating that are a data miners dream.

     

     

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    johnpostava
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    04/15/2008 9:23 AM
    Les,

    I fully agree with your last statment - X is evolving from a contractor's program into an insurance industry program and the contractors that have relied on X for years now have to bear the weight of X's changeover. It's ironic that the program contractors once used to do battle with adjusters is now the program that tells them what they can charge for their work and how much profit they can make if they control their restoration company's direct overhead and expenses.

    If, over the next few years, enough contractors move away from X and use the other estimating products (like mine or Gale's), it may swing the pendulum back to sanity (market driven pricing) and away from percieved price fixing in property claims. If the entire industy uses only one estimating tool (whatever it is), a monopoly is created that hurts adjusters, contractors and policyholders all at the same time. Controled unit cost pricing by its very nature will be on the low side. This causes contractors to have to cut corners, purchase lower grade materials, hire lower waged workers just in order to stay in business. I don't think anyone wants their home repaired in this manner.

    In the middle to late 90's when X was really beginning to land carrier after carrier, all I heard from claim managers was "we went with X because all the contractors use it". Contractors need to remember that they have the real power over adjusters because they are the ones who do the work and at the end of the day, have to be with that insured until the work is completed (and make a profit to feed their families). The adjuster writes a check and is gone by the beginning of the restoration process (usually, unless a problem arises and a supplement is called for).

    If you are a reputable contractor in your area and do good work, the carrier has to accept your estimate if the insured wants you to do the work and your numbers are reasonable - no matter what estimating platform you use....contractors with clout in their respective areas need to remember this if things are going to change for the better.
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    Tom Toll
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    04/15/2008 9:34 AM

    If any of you Xactimate users thinks that company cares about you, you better think again. Their goal, in my opinion, is to cut us out of the adjusting loop and control everything. The only decent entity out there is Simsol. They are people who have and do work in the field and care about the adjusters who work their tails off to support their families.

    I want to see how Exactware is going to handle thousands of inventory claims when a large cat hits. There are not that many water suckers out there and they will not be able to handle that many claims. Like John and Ray have said, and now me, how can they work claims without an adjusters license. MSB has finally destroyed DDS and unless their new program can drag them into competetion, they are useless.

    I would love to see them handle a claims I have right now. A welding shop that has equipment in it that many people have not even heard of. I was raised on a farm with a father who was an outstanding welder/fabricator and am familiar with all the equipment. Even at that, I have spendt at least 9 hours on the phone to get prices for repairs, replacement and clean up. Will I be paid fairly for the work done on this file, I think not, but it will be done right and the insured will be made as whole again as possible.

    This industry is suffering terribly. Rates are high, service is terrible, and adjusters just cannot make a good living at this anymore.

    Success is not final, failure is not fatal: it is the courage to continue that counts.
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    Florida Boy
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    04/15/2008 10:29 AM

    Posted By John Postava on 04/15/2008 9:23 AM
    Les,

    I fully agree with your last statment - X is evolving from a contractor's program into an insurance industry program and the contractors that have relied on X for years now have to bear the weight of X's changeover. It's ironic that the program contractors once used to do battle with adjusters is now the program that tells them what they can charge for their work and how much profit they can make if they control their restoration company's direct overhead and expenses.

    If, over the next few years, enough contractors move away from X and use the other estimating products (like mine or Gale's), it may swing the pendulum back to sanity (market driven pricing) and away from percieved price fixing in property claims. If the entire industy uses only one estimating tool (whatever it is), a monopoly is created that hurts adjusters, contractors and policyholders all at the same time. Controled unit cost pricing by its very nature will be on the low side. This causes contractors to have to cut corners, purchase lower grade materials, hire lower waged workers just in order to stay in business. I don't think anyone wants their home repaired in this manner.

    In the middle to late 90's when X was really beginning to land carrier after carrier, all I heard from claim managers was "we went with X because all the contractors use it". Contractors need to remember that they have the real power over adjusters because they are the ones who do the work and at the end of the day, have to be with that insured until the work is completed (and make a profit to feed their families). The adjuster writes a check and is gone by the beginning of the restoration process (usually, unless a problem arises and a supplement is called for).

    If you are a reputable contractor in your area and do good work, the carrier has to accept your estimate if the insured wants you to do the work and your numbers are reasonable - no matter what estimating platform you use....contractors with clout in their respective areas need to remember this if things are going to change for the better.

     


    I 'bought' Xact for $3,000 in 1994. Lifetime license, but that changed and the licence is useless as it does not extend to the new version(s) IMHO, it is no longer an adjuster friendly program. However, it now has an underwriting check list and no statement of loss.  :-)  A friend just returned from a vendor seminar. To receive and acknowledge a claim electronically he had to go through 15 windows. This has to be done on every claim. No kidding.

    It is my understanding that Xact prices come from submissions/input/surveys from contractors. However, that does not preclude a carrier from creating a price list with different unit costs. A contractor version of Xact is still available. I do like Xact for large losses but it is overkill for the average claim.

    P.S. I worked a hail claim on your sister in laws's home during the great Orlando hail storm of 1992 when I was staff for Farm Bureau. My, thing have changed since then.

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    Florida Boy
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    04/15/2008 10:36 AM

    This industry is suffering terribly. Rates are high, service is terrible, and adjusters just cannot make a good living at this anymore.

     

    Tom,

     

    You forgot to mention record profits.

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    cowboy26995
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    04/15/2008 2:32 PM
    In Canada we have had vendors that meet the insured at the loss site ,record their contents loss and look after securing replacement costs. All this is performed at the carriers request . The adjuster deals with the building, coverage issues and reports. No contents. Seems to work fine. I for one hate listening to insureds embellish the list anyway.Something else to get used to I guess.
    Marc Dubois
    Executive General Adjuster
    M.G.D. Claim Services Inc.
    "Your Commercial Claims Solution"
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    johnpostava
    SIMSOL.com
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    04/15/2008 2:57 PM
    Marc,
    We have vendors who are contents specialists that only handle the contents claim. What is different about this deal is the building repair contractor will now be handling (pricing to replace) the contents as well. To the best of my knowledge, I have never seen this before.
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    cowboy26995
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    04/15/2008 6:06 PM

    We have had restoration contractors documenting the insured's contents loss for years. In doing the cleanup post loss they simply photo and list prior to disposal. I don't see anything wrong with this as long as pricing determination, depreciation application and replacement costing are not part of the deal and left with the staff or independent adjuster.

    Marc Dubois
    Executive General Adjuster
    M.G.D. Claim Services Inc.
    "Your Commercial Claims Solution"
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    Ray Hall
    Senior Member
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    04/15/2008 8:14 PM

    Well this will give us all something to think about. The adjuster in cyberspace calls the insured and advises the insured he will "walk them through" the adjustment of their dwelling loss and it will take about 2 hours and set the app;ointment for 48 hours, all this after asking the insured if he has a high speed internet connection in his house. If not he can tell him what to do today and go to a public library a get a computer booted up and call him back when all this done.

    The adjuster downloads a version of xmate that is good for 48 hours , connects the two computers and they sketch that dude out, upload all photos, has the insured burn a copy of the complete estimate gets it agree to and ask the insured to return the camera and laser device in the SAAE. The adjuster closes 6 file per shift and then the night shift comes in. If the insured is spooked with getting on the roof the adjuster down loads the satellite of the before and after shots with the measurements. And better still, the before and after is shown to the insured on his computer for straight down hail and this dude can settle about 50 per shift in the day and 50 at night.

    Now what is un professional about settling this amount of claim per day with exact prices that a list of contractors a mile long will line up to do without one single supplement or call back.

    Oh to make the whole operation more professional, burn a check that can be printed out and this baby is put to bed, don,t worry about the service bill as the IA is working on a day rate and xmate knows how much time he is at his puter from his log in to  log out and the long pause's are measured.

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    Davidad1
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    04/15/2008 11:23 PM

    "It is my understanding that Xact prices come from submissions/input/surveys from contractors. However, that does not preclude a carrier from creating a price list with different unit costs. A contractor version of Xact is still available. I do like Xact for large losses but it is overkill for the average claim."

    Being an estimator for a large reconstruction general contractor in Northern California Bay area who only does insurance work.... I still do not know where they come up with their pricing... I read all of X's white papers about pricing ..... My feeling is that they ask the new home builders who have 15 homes with the same floor plans for costs and that buy material in bulk for the material costs they list... There are many trades that in our area are not even close to the prices listed.....We have asked who they get the pricing from so I can call that trade to get the work done for my customer with the quality to put my customer back to a pre loss condition   ...They do not say........

    Estimating is living on the edge between greed and fear
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    BobH
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    04/15/2008 11:51 PM

    That's an interesting perspective Dave. Lot's of people have the opposite opinion, that Xactimate prices are high, and forced upon adjusters by contractors.

    I am sort of in the middle - I think it all comes down to an accurate statement of the work being done. Not the price per Sf so much as a focus on all the steps that have to be done to get the repair completed. One guy may write "R&R sheet vinyl". The next guy may realize it will need floor prep after scraped, or that the underlayment (not the subfloor) has to also be replaced, and there is edge metal where joins the carpet, waste based on 6' or 12' roll with pattern match, etc. Yanking the base and hammering it back will need to be painted - and of course that isn't included in the vinyl price but some estimators over look that - as well as the obvious stuff like moving contents and appliances, D/R toilet, etc.

    I just read all those white papers too, as I was searching the Xactware site on something else. I have been using that software for 15 years, and think it is like an instrument in the hands of the musician. You can make music with it, or noise.

    Contractors in my area could walk into the same small fire, and one using Xactimate may have a 15k sheet and the next guy 24k, its all in the scope and the details. I'm not talking about charging for detaching light switch plates, and removing light fixtures that can be masked. It's knowing what has to be done to fully handle smoke odor trapped in the stud wall and insulation, issues with water damage, etc. Just doing a thorough and accurate scope that doesn't ignore needed repair items.

    And sometimes that means adding 4 hours labor for a trade to do something specific, to tie in with existing, if the unit cost for the Sf of repair isn't right. I know in our area I can look at some hammered drywall and know the local contractor isn't getting out of bed for the Sf x unit cost involved in that loss, so I have to make some adjustments and explain why in an estimate note. You can't say the unit cost was too low, because if it was an upstairs pipe that broke and hammered a lot of drywall downstairs it would be fine (especially if you don't ignore the bullnosing which is an added fee, and realize that drywall damaged along a door involves casings etc - you know that but the adjusters you work with may know nothing of how to do these repairs.)

    It's just like playing the guitar, it's how you use it. I'm not saying to overpay claims either, and sometimes we have to push costs the other direction when they are padded or over-scoped.

    Bob H
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    Davidad1
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    04/16/2008 12:23 AM
    Bob

    You are so correct. It is about the experience and knowledge of the person writing the scope... I pride myself on writing a correct scope of loss for each loss. Of course I want to sign the insured for our company to do the repairs , but also I want the repeat business from the Carrier / adjustor.
    I know alot of others in my field ( estimators) that do not even know how a house is put together or what pressureized smoke from a attic fire will do to smoke travel down walls vs a indoor fire with no attic pentration. Etc. They overwite the claim to cover for the lack of knowledge about what they do. Like you said you can make music or noise..... I prefer music .
    Estimating is living on the edge between greed and fear
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    BobH
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    04/16/2008 12:37 AM
    Coolness.

    I know prices are high in your area - so if the unit costs don't work for a specific trade... I have a file right now where the Water Damage Restoration company is attaching a subcontract bid for the flooring (adding O&P) and for granite counter as they are higher end.

    Sometimes you just do a hybrid type estimate, unit costs + the unique item. And it is what it is.
    Bob H
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    Medulus
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    04/18/2008 5:49 PM

    I had a recent opportunity to guage Xactimate pricing for Northern California during the January windstorm in the central area of northern California -- between Fresno and Redding.  I was temping at a commercial desk and received 104 claims in two days to serve as claim examiner and assign them to independents.  The company I was temping for required Xactimate be used by the independents.  My assignment to all the independents was:  Inspect the loss, write your own estimate and get it back to me as soon as possible.  Do not get agreed pri9cing or release a copy of the estimate before I have reviewed it.  Most of the losses were on farm policies.

    Of the files where I got an Xactimate estimate and also received an estimate from the insured's contractor (about 35 of the 104), 100% of the Xactimate estimates were higher than the contractor estimates.  Many of the Xactimate estimates were 30% or more higher than the contractor estimates.  Interesting?  You bet.  Localized results and anecdotal evidence?  You will get no argument from me on that point either.

     

    Steve Ebner CPCU AIC AMIM

    "With great power comes great responsibility." (Stanley Martin Lieber, Amazing Fantasy # 15 August 1962)
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    BobH
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    04/18/2008 8:10 PM

    I hear ya - and that's kind of why I disagreed with David on 4-16-08 that Xactimate was too low. If you don't overlook the needed repair steps, don't forget the quarter round when you are doing the floor, etc, there is plenty of food on the table (and maybe some left-overs).

    Most of the losses were on farm policies.

    That's an interesting point too. I get a fair amount of Farm policy work, and it is kind of the opposite of the kind of padded "Beverly Hills" type restoration estimate. There are still some "Salt of the Earth" people in California, but maybe you have to go to the rural farms to find them...

    This is one that I looked at from that same January, 2008 storm that hit California.

    100 year old barn, my 24' ladder was barely tall enough, but I was able to get close-ups showing the damage was new, shiny parts of old nails pulled out with the displaced boards. 

    Bob H
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